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The Poor Man’s Gold

By Dr. Steve Sjuggerud
Wednesday, August 16, 2006

Nine hundred and ninety percent.

That’s how much mint condition silver dollars rose in the great silver bull market from 1976 to 1980.*

Morgan silver dollars – the most popular coin ever struck in the U.S. – reached a price of $100 a coin in 1980, for coins in mint state (MS-65) condition.


The coins didn’t stop there... by the first quarter of 1986, these mint state Morgan dollars graded MS-65 by PCGS peaked at around $1,000 per coin. (Silver spent much of 1986 at a price of between $5 and $6 an ounce.)

Today – over 20 years later – you can buy those same mint state (MS-65) Morgan dollars for about $200. Yes... the price of mint state silver coins has fallen by 80% over the last 20 years.

Let me recap: In 1986, silver was around $6. And these MS-65 Morgan dollars peaked at around $1,000. In 2006, silver is around $12, twice it’s 1986 value. And these MS-65 Morgan dollars are currently priced around $200.

In short, nobody cares about silver. When it comes to precious metals, gold gets all the press... but silver might be the better play...

With things like these Morgan dollars, silver may be a better investment bargain than gold... And silver has more uses, too. It really is an industrial metal in addition to being a precious metal. There are many ways to play it. Let me share a few good ones:

There are coins, like the one mentioned above (my good friend and coin dealer Van Simmons filled me in on the history of the Morgan dollar above... you can reach him at [email protected] or 800-759-7575).

You can buy silver in paper form. One way is in your brokerage account, through the silver ETF (the symbol is SLV, and it’s simply the price of silver, times ten). Another way is through Perth Mint Certificates, which are an interesting program worth checking out (visit for the details). And then of course...

You can invest in silver mining companies. Since silver is typically a by-product of mining other metals, there are very few sizable “pure plays” in silver.

The table below, taken from last month’s issue of Sjuggerud Confidential (so it’s not up-to-the-minute accurate) lists three of the market’s large pure silver plays.



Stock market value in millions

Oz. of silver
in the ground**

Price per oz.
in the ground

Pan American Silver





Silver Standard





Silver Wheaton





**Proven and probable reserves, from the latest Gold Stock Analyst letter

The numbers are a bit deceiving in the table. For example, Silver Standard looks expensive based on proven & probable reserves... but it has “unproven” reserves of in excess of a billion ounces of silver in the ground. So it’s not as expensive as it seems...

I like silver as play on the bull market in precious metals. I like silver so much, I devoted the latest issue of my newsletter Sjuggerud Confidential to my favorite way to play silver.

If you don’t own any silver yet, you should... Fortunately, I’ve trimmed the wide list of options down to the best choices out there in today’s letter.

Check them out, and buy what’s right for you.

Good investing,


*990% was the price rise of MS-65 condition silver dollars, according to the book A Mercenary’s Guide to the Rare Coin Market by David Hall.

Market Notes


The call for a sell-off in crude oil has become almost deafening…

Analysts point out that crude has enjoyed a “Goldilocks” bull market for the past few years… that bullish sentiment is frothy and an overdue decline is on the way.

For a pro’s opinion on plunging oil prices, we asked S&A Oil Report editor Matt Badiali for his take… the gist of his reply is as follows:

I’m not concerned about a short-term decline in oil prices… no bull market advances without a correction. I’d actually welcome a fall down to $55 or $60 a barrel. It would scare a lot of investors… and give me a chance to pick up some great oil companies at bargain prices.

Is oil due for a correction? Yes. Will that correction create a great long-term buying opportunity? Yes. Act accordingly.”

The Goldilocks bull market in crude oil (3-year chart):

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